Xi visits the troops in Guangdong; Cornell cancels programs with Renmin U over academic freedom issues; New report on PLA researchers using western universities; Party trying to put a floor under the stock market

Thank you for all the feedback to Saturday's note Peking University gets a new leader. I got so much I need to apologize if I did not reply individually, but I hear you and the messages have me rethinking some things about the newsletter. 

Thanks for reading.

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The Essential Eight

1. Xi visits southern theater command

Xi inspects PLA Southern Theater Command, stresses advancing commanding ability - Xinhua:

Xi instructed theater commands to accelerate capacity-building for commanding and improve their commanding and operation systems to ensure smooth and efficient command.

Research on issues concerning war and combat should be encouraged to enhance the military's ability to win modern wars, he said.

Xi stressed that Party committees of theater commands must uphold the Party's absolute leadership over the military, arm officers and soldiers with the Thought on Socialism with Chinese Characteristics for a New Era and the Party's thought on building a strong military, and consolidate the ideological foundation of absolutely obeying the Party's command.

The CCTV Evening News report, interesting scenes from inside the command center - 习近平在视察南部战区时强调 加快推进战区指挥能力建设 坚决完成担负的使命任务

Comment: "The "prepare for war" comment does not seem to be anything new, and isn't it what you are supposed to tell military leaders? 

‘Prepare for war’, Xi Jinping tells military region that monitors South China Sea, Taiwan | South China Morning Post:

China’s President Xi Jinping has ordered the military region responsible for monitoring the South China Sea and Taiwan to assess the situation it is facing and boost its capabilities so it can handle any emergency.

The Southern Theatre Command has had to bear a “heavy military responsibility” in recent years, state broadcaster CCTV quoted him as saying during an inspection tour made on Thursday as part of his visit to Guangdong province.

“It’s necessary to strengthen the mission … and concentrate preparations for fighting a war,” Xi said. “We need to take all complex situations into consideration and make emergency plans accordingly.


2. Cornell cancels two programs with Renmin University

Concerns over punishment and harassment of students who have supported workers’ rights led to the termination.

Cornell ends partnership with Chinese university over academic freedom concerns - Inside HIgher Ed:

Eli Friedman, director of international programs for Cornell’s School of Industrial and Labor Relations, said that the ILR School had suspended two exchange programs because of concerns that its Chinese partner institution, Renmin University of China, had punished, surveilled or suppressed students who supported workers’ rights in a labor conflict that erupted this past summer involving workers trying to unionize at Jasic Technology in Shenzhen -- or who have otherwise been supportive of workers’ rights. Students who traveled to Shenzhen to support the workers have reported facing pressures from their various universities...

The decision affects two student exchange programs that brought Renmin students to Cornell and Cornell students to Renmin. A research partnership between the two institutions was already largely dormant because, Friedman said, “the increasingly restrictive environment for academic freedom over the last couple years has meant it’s basically impossible for us to do the kind of research that I want to do.”..

He continued, "I think that one of the reasons that this case has been one of the first to draw attention to this is specifically because we are a labor school and this was a labor issue, and the state was saying you can no longer study this. But you can imagine this happening in all sorts of other realms as the number of issues that become deemed too politically sensitive continues to grow

Global Times editor in chief Hu Xijin took to Twitter to accuse Mr. Friedman of lying, so Friedman posted the letter he sent to Renmin U. The thread:

This and the Peking University leadership should be yet more wake up calls to foreign educational institutions with PRC partnerships.


3. As Xi convened a discussion about "breaking new ground in the cause of workers' movement and trade unions' work"

Xi urges breaking new ground in workers' movement, trade unions' work - Xinhua:

Xi Jinping, general secretary of the Communist Party of China Central Committee, on Monday called for mobilizing the country's hundreds of millions of workers to vigorously make accomplishments in the new era and breaking new ground in the cause of workers' movement and trade unions' work.

Xi, also Chinese president and chairman of the Central Military Commission, made the remarks during a talk with the new leadership of the All-China Federation of Trade Unions.

CCYV Evening News on Xi's comments - 习近平在同中华全国总工会新一届领导班子成员集体谈话时强调 团结动员亿万职工积极建功新时代 开创我国工运事业和工会工作新局面:

习近平强调,工会要忠诚党的事业,通过扎实有效的工作把坚持党的领导和我国社会主义制度落实到广大职工群众中去。要认真落实新时代党的建设总要求,增强“四个意识”,坚定“四个自信”,坚决维护党中央权威和集中统一领导,始终在政治立场、政治方向、政治原则、政治道路上同党中央保持高度一致。要完善学习制度,深入开展新时代中国特色社会主义思想的学习培训,增强对党的基本理论、基本路线、基本方略的政治认同、思想认同、情感认同,不断提高运用马克思主义立场、观点、方法分析解决问题的能力和水平。要深刻领会党中央关于工人阶级和工会工作重要论述的精神实质,结合实际落实到工会工作全过程和各方面。要把执行党的意志的坚定性和为职工服务的实效性统一起来,把党的路线方针政策和决策部署落实到工会各项工作中去,把党的意志和主张落实到广大职工中去。

Among the listed attendees were Wang Huning, Ding Xuexiang, Yang Xiaodu, Chen Xi, Guo Shengkun and Huang Kunming.

Some background:

Maoists Call on China's Official Union to Stand up For Workers - RFA:

A Maoist group backing a workers' movement in the southern province of Guangdong on Thursday called on the ruling Chinese Communist Party's official union to stand up for workers' rights, and work for the release of detained workers and activists.

Yue Xin, a graduate of China's prestigious Peking University and former #MeToo campaigner remains incommunicado after being detained alongside dozens of others on Aug. 27, the Jasic Workers' Solidarity Group (JWSG) said in an open letter to the All-China Federation of Trade Unions, which is holding its annual congress in Beijing.

There is speculation that the Yue Xin case and the challenges of managing Marxist students at Peking University were among the factors that led to the surprise replacements of the Peking University President and Party Secretary.


4. PLA researchers "picking flowers, making honey" at western universities

The full report - Picking flowers, making honey. | Australian Strategic Policy Institute | ASPI :

In China, the PLA’s overseas research collaboration is described in frank terms. The PLA Daily uses the saying ‘Picking flowers in foreign lands to make honey in China’ to explain how it seeks to leverage overseas expertise, research and training to develop better military technology.20

This is one aspect of what China calls ‘military–civil fusion’ (军民融合). The term refers to China’s efforts to improve its military’s ability to take advantage of the creativity of the civilian sector and develop its own indigenous military–industrial complex. Described by PLA experts as a ‘cornerstone of PRC national defense reform’, military–civil fusion is helping to drive the modernisation of the PLA.

Chinese military researchers exploit western universities | Financial Times $$:

About 2,500 researchers from Chinese military universities spent time at foreign universities — led by the US and UK — over the past decade, and many hid their military affiliations, according to a new report from the Australian Strategic Policy Institute (ASPI), a think-tank partly funded by Australia’s department of defence.

The research effort focused on members of the so-called “Five Eyes” group of countries with which the US shares an intelligence relationship: the UK, Australia, New Zealand and Canada. Over the past five years, researchers affiliated to the People’s Liberation Army published more joint papers with scientists from the UK and the US than with those of any other country.

China’s Military Sends More Scholars Abroad, at Times Without Schools’ Knowledge - Wall Street Journal $$

In some cases, the Chinese scientists masked their ties with the PLA, enabling them to work with professors at leading universities like Carnegie Mellon without the schools’ knowledge of their military affiliation, according to Wall Street Journal interviews.

Typically, these PLA scientists are civilian Communist Party members with sound “political credentials,” who go through intensive training before leaving, the report says. It quotes the PLA Daily, a military publication, warning that if students sent overseas “develop issues with their politics and ideology, the consequences would be inconceivable.”

Comment: A very targeted ban on PRC academics studying in certain S&T fields in the US if not other five eyes countries is likely.

Military-civilian integration has always been around in the PRC but it seems to have gotten a bigger push under Xi—Why China Technology-Transfer Threats Matter - 10.24.18 Remarks Dr. Christopher Ashley Ford Assistant Secretary, Bureau of International Security and Nonproliferation:

As part of this effort, ISN is placing increasing emphasis upon raising awareness about, and putting up barriers to, the proliferation of sensitive technologies to the People’s Republic of China – technologies which Beijing has been using to build up its military capabilities in support of its ambitious “China Dream” of “national rejuvenation” to regain China’s position as a world leader in a range of fields, including military might. Beginning last July at the Los Alamos National Laboratory, we have been publicly drawing attention to the degree to which both licit and illicit transfers have been used to augment Chinese military power, as authorities in Beijing have – in a process known in Chinese strategic writings as “Military-Civilian Fusion” (MCF), and now personally overseen by Xi Jinping himself – systematically worked to routinize military application of know-how acquired abroad...

What is clear, however, is that China is today engaged in a state-led, industrial-policy-based, whole-of-nation competitive strategy that revolves in crucial ways around the acquisition of sensitive foreign technologies by any, and every, possible means. This effort takes advantage of open economies to attempt to ensure China’s ability to rely on itself as a source of critical technologies.

Chinese vice premier urges deeper military-civilian integration - Xinhua:

Chinese Vice Premier Han Zheng on Monday attended a national symposium where plans were made to advance military-civilian integration...

Han spoke of the need to accelerate legislation, strengthen planning, focus on key difficulties, and seek breakthroughs in key areas, so as to push forward military-civilian integration.

He said the building of major strategic projects should be used to advance the coordinated technological innovation between the military and civilian sectors, coordinate resource allocation to boost efficiency, and achieve the best performance.

Han said Party committees and governments at all levels should view implementing the military-civilian integration as a major political responsibility

韩正出席全国军民融合发展工作座谈会 


5. US-China

China Still Poring Over Little-Noticed Pence Speech Weeks Later - Bloomberg:

Some foreign ministry officials and advisers have dusted off copies of Churchill’s speech in Fulton, Missouri, in which the then-U.K. opposition leader urged Western democracies to stand up to communist expansion in Europe. Some historians, including those in China, see it as a crystallizing moment in the decades-long struggle between the U.S. and the Soviet Union.

Still, Chinese officials have found solace in the differences. Pence, for instance, largely listed U.S. complaints and offered no grand strategy for countering China.

“The quality of the language of Pence’s speech is much lower,’’ said Wang Wen, of the Chongyang Institute.

One Chinese official who asked not to be identified noted that the U.S. hasn’t yet taken any real action outside of tariffs. Another expressed confidence that American allies such as Australia, Japan and South Korea, wouldn’t risk a breakdown in ties with China to join a U.S.-led containment push.

Economist Zhang Weiying slams ‘China model’ that ‘inevitably leads to confrontation with the West’ | South China Morning Post

Zhang Weiying, one of the most prominent liberal economists in the country and a professor at prestigious Peking University, made the comments in a lecture on October 14. An edited version of his speech was published on the university’s website on Wednesday.

The speech is a wholesale negation of the “China model” theory that has gained traction in recent years, as the country becomes more confident in promoting its own development path under President Xi Jinping...

“The hostile international environment we face today is not irrelevant to the wrong interpretation of China’s achievement in the past 40 years by some economists.”

Lots of intellectuals and elite may agree with Zhang, but who is going to actually do anything given the risks of pushing back under Xi?

The original speech, now deleted but still available in Google cache 张维迎:理解世界与中国经济

The US-China trade war as a conflict of values | Andrew Batson's Blog:

In some ways it is not surprising to hear such statements from Sheng and Zhang, whose views are well established, and also far out of the mainstream of Chinese intellectual opinion. What is interesting is that these views are coming out at this moment–although since the comments of both authors are regularly scrubbed from the Chinese internet, it is hard to know how much impact they have.


6. Details about the brain injuries US diplomats suffered in China

Evacuated after 'health attacks' in Cuba and China, diplomats face new ordeals in U.S. - NBC:

Alone in her bed in a sprawling Chinese metropolis, Catherine Werner was jolted awake one night by a pulsing, humming sound. It seemed to be coming from a specific direction.

Perhaps the A.C. unit in her upscale Guangzhou apartment was malfunctioning, the American diplomat thought. But at the same moment, she also noticed intense pressure in her head.

The sounds and sensations returned, night after night, for months. When Werner's health began declining in late 2017 — vomiting, headaches, loss of balance — she brushed it off at first, thinking China's polluted air and water were getting to her.

It wasn't until months later — after her mother, Laura Hughes, grew alarmed, flew in from the U.S. and then got sick, too — that Werner was medevaced from China back to the States...

some diplomats and their doctors now tell NBC News they have growing concerns that the U.S. is trying to downplay whatever happened — at least in China.

Equally unsettling to the diplomatic evacuees: suspected incidents of harassment and break-ins they say have occurred since returning to the States. Four U.S. officials tell NBC that the FBI has investigated...

Werner and her mother noticed signs of home intrusions in Guangzhou:

When mother and daughter noticed signs of home intrusions — lights turned on that had been left off, household items out of place — they adopted two dogs.

Question: Don’t the Russians do that to American diplomats and is it just Americans who have suffered these symptoms?


7. Party putting a floor under the stock market?

China regulator urges Beijing banks not to force liquidation of pledged shares: Yicai | Reuters:

The Beijing branch of the China Banking and Insurance Regulatory Commission (CBIRC) said unrealized losses or lending risks associated with shares that banks hold as collateral against loans will not be part of regulatory inspections, according to Yicai.

China’s troubled private listed firms offered billion-dollar bailouts | South China Morning Post:

The government of east China’s Zhejiang province, which is home to such companies as Alibaba Group – which owns the South China Morning Post – and Geely Automobile, said it would make up to 10 billion yuan available, while authorities in Shantou, a city in southern Guangdong province, said they would put 5 billion yuan on standby, according to official statements.

China Says National Team Is Buying, Not Selling, as Stocks Fall - Bloomberg:

China’s securities regulator said the market misinterpreted recent news about five state-backed funds liquidating their stock holdings, assuring investors that “relevant institutions” have actually increased their positions.

The rare government comments about China’s “national team” of state investors, delivered in a brief statement on the China Securities Regulatory Commission’s website Monday, follow a $3.2 trillion selloff in local shares that has rattled investor confidence in Asia’s largest economy.

China Turns to Share Buybacks as Latest Weapon to Rescue Market - Bloomberg:

After a faster-than-usual revision to law, companies can repurchase shares with approval from at least two-thirds of the board if deemed necessary to protect shareholders’ interests, or if it’s for convertible bonds exchange, the National People’s Congress said Friday. Firms were previously only allowed to buy back shares for purposes including stock incentives, and it was mandatory to go through shareholder meetings for approval.

Hillhouse Said to Seek Billions of Dollars for China Stocks - Bloomberg:

Hillhouse Capital Management Ltd. is seeking to raise billions of dollars to invest in beaten-down Chinese stocks after this year’s market rout, according to people with knowledge of the firm’s deliberations.

Zhang Lei’s more than $50 billion investment firm may raise about $4 billion to be split between its flagship Gaoling Fund and the Hillhouse China Value fund, said one of the people, who asked not to be named discussing private information. The overall fundraising amount could change, according to the people.

Comment: A few years ago a friend at a top tier major investment bank told me their firm was very nervous about working with Hillhouse because Zhang Lei always seemed to know about central government financial policies before they had been made public...True or not, Zhang Lei is always worth paying attention to...


8. Sri Lankan crisis to benefit Beijing?

Sri Lankan crisis deepens as rivals claim premiership | Financial Times $$:

“New Delhi has been shocked by what has happened and this is not going to play out in India’s favour,” says Abhijit Singh, a maritime security expert at New Delhi’s Observer Research Foundation. 

“New Delhi believed that Rajapaksa was a Chinese proxy and they did everything in their power to see him defeated,” Mr Singh said. “Rajapaksa is going to be extremely hostile to India because he believes that the root of all his woes is India, and that it is New Delhi’s machinations that resulted in his defeat.”

Sri Lanka's Crisis Reflects Battle For Influence Between India And China - NDTV:

Sri Lankan President Maithripala Sirisena unexpectedly dismissed Prime Minister Ranil Wickremesinghe on Friday and appointed former strong-man president Mahinda Rajapaksa as his replacement. On Saturday he suspended parliament until November 16 in a power struggle that's brought fresh turmoil to the island nation.

The decision to reappoint Rajapaksa -- who ruled between 2005 and 2015 -- is expected to have regional impact, with his ties to China and history of borrowing heavily from Beijing to fund infrastructure projects. The return of Rajapaksa may also dent New Delhi's influence in Colombo, given Wickremesinghe's attempts to re-balance Sri Lanka's foreign relations away from China and toward India and Japan.

Chinese President Xi Jinping congratulates newly appointed Sri Lankan Prime Minister Mahinda Rajapaksa - The Financial Express:

“China’s Ambassador to #SriLanka Cheng Xueyuan called on newly appointed Prime Minister Mahinda Rajapaksa earlier today to convey congratulatory wishes from Chinese President Xi Jinping,” Rajapaksa himself tweeted, along with a picture.

Chinese Ambassador Cheng also paid a courtesy call on UNP leader Ranil Wickremesinghe, Daily Mirror newspaper reported on Sunday.

Sri Lanka arrests top policeman over 'plot to kill president' - Reuters:

Silva will be held until November 7, on magistrates' orders. He was arrested after a police informant made the allegations against Silva in a news conference.

Investigators say they are seeking access to deleted data from the informant's mobile phone with the help of Chinese telecommunications company Huawei after a court granted permission to request the company's help.

A Huawei spokesman told Reuters news agency that the company had received no such request from Sri Lanka and Silva's lawyers were not immediately available for comment.


Business, Economy, Finance And Trade

China environment facing pressures from economic slowdown: minister | Reuters At a meeting last week, Minister of Ecology and Environment Li Ganjie told officials that China’s clean-up campaign was becoming “increasingly complex”, according to details of the meeting published by the ministry’s official publication, China Environmental News...But while China is “ahead of schedule” when it comes to curbing pollution, the environment now faced an increasing number of challenges as a result of slowing growth, structural economic adjustments, widening regional disparities and unfavorable weather conditions, environment minister Li told officials.

In Depth: The Multi-Billion Dollar Black Hole of a State Fuel Trader - Caixin In just four years, Chairman Xiong Shaohui saw its ambition come true as Guangdong Zhenrong Energy, a state-backed fuel trader, expanded annual revenue 10-fold to become one of China’s largest players in the global energy market. But it took even less time to prove that the colossus was just a castle built on sand...As of April 2017, Guangdong Zhenrong had defaulted on 21.5 billion yuan ($3.1 billion) of bank loans, with 18.8 billion yuan vanishing from its books, an audit of the company found. Auditors determined that the company had no realizable assets, fabricated trade deals to get bank loans and left ever-growing bad loans, sources close to the matter told Caixin...Sources close to the company said about two-thirds of Guangdong Zhenrong’s capital has flowed into downstream companies controlled by a mysterious businessman supposedly named Xie Yun. The amount of money that went to Xie may have totaled more than 10 billion yuan, one source said.//Question: Who is Xie, why was Xiong Shaohui able to take over this PLA-affiliated firm and grow it so fast, and is this Caixin expose really hinting at someone/some people behind this firm and this mess?

China Regulator to Propose 50% Cut to Car Purchase Tax - Bloomberg Carmaker shares surged after Bloomberg News reported the proposal, which would stimulate a market they’ve increasingly relied on for growth. Volkswagen AG, selling just under 40 percent of its vehicles in China last year, rose as much as 6.9 percent, the biggest intraday move since July 2016. Ford Motor Co. and General Motors Co. rallied in U.S. trading, while BMW AG and Daimler AG gained in Germany.

China's yuan sinks to 10-year low against dollar - AP The yuan declined to 6.9644 per dollar at midday, passing its most recent low in 2016 before recovering slightly. It was the lowest level since May 2008.

China tells speculators not to hope for relaxed curbs on property purchases | Reuters hina warned property speculators against holding false hopes for a price rally, in a report on Monday by state news agency Xinhua that said authorities would not loosen curbs on buyers to spur investment even as the economy slows...The Xinhua report said a “long-term mechanism” - including the potential introduction of a nation-wide property tax - is being studied, and existing administrative controls would not be abandoned halfway.

‘Buy American’ makes its way into USMCA - POLITICO USMCA DAIRY PROVISION THAT JABS CHINA: We at Morning Trade have noted a time or two that the new USMCA deal includes subtle jabs at China. Our colleague Sarah Zimmerman today digs deep into another example: It will curtail a big-ticket investment by China in Canada’s dairy sector. A baby formula factory tug-of-war: POLITICO learned that the U.S. and Canada engaged in detailed negotiations about a Chinese dairy investment involving Feihe International, which is building an infant formula plant in Ontario. Ultimately, U.S. insisted on capping exports of liquid formula but Canadian officials ensured that the quota for baby-formula exports allowed just enough room for the Chinese-built factory to proceed as planned.

Chinese traders play down impact of new animal feed guidelines on soy demand | Reuters China’s Feed Industry Association on Friday approved new standards for feed for pigs and chickens, lowering the protein levels in pig feed by 1.5 percentage points and those for chickens by one percentage point, the agriculture ministry said in a statement that day. The standards are only guidelines and the ministry did not say when they would take effect, with traders saying that prices would continue to be the key focus for soymeal consumers. “The new standards are not enforceable (as they are based on guidelines),” said a soybean trader in China, declining to be identified due to the sensitivity of the matter.

Unicom Calls on Outsiders to Run Five of Its Telecom Networks - Caixin The parent of wireless carrier China Unicom (Hong Kong) Ltd. said it will let partners take over its operations in five cities of Southwest China’s Yunnan province — the latest Beijing initiative to invigorate big state-owned enterprises (SOEs).

President Xi to attend opening ceremony of China's 1st import expo - Xinhua Xi will deliver a keynote speech at the ceremony and visit the country pavilions with foreign leaders, Vice Commerce Minister Fu Ziying told a press conference. The president and his wife Peng Liyuan will host a welcoming banquet on Nov. 4, and he will meet heads of state and government during the CIIE which runs from Nov. 5 to 10, Fu said.

Alibaba Voices Displeasure as Jack Ma Tops China’s Cashing Out List With USD1.6 Billion | Yicai Global Alibaba Group Holding has voiced concerns after founder Jack Ma topped a ranking of Chinese entrepreneurs by the amount of money they had cashed out of their respective companies. The Hurun Cash Out Rich List 2018 found that the Hangzhou-based firm’s head had cashed CNY11 billion (USD1.6 billion) over the past year, 21st Century Business Herald reported.

China's Biggest Courier Gets Bigger With Purchase of DHL Logistics Unit - Caixin Under the deal, the German giant’s relevant operations in mainland China, Hong Kong and Macau will be incorporated into SF Holding and operate as a co-branded organization, according to a DHL statement issued Friday. The deal doesn’t involve Taiwan.

Chinese Central Bank to Share Personal Info of Absconding P2P Debtors - China Banking News Sources from the Chinese central bank said to Economic Daily that the first batch of information on absconding debtors has already been incorporated into its financial credit information database, and will be made available to 3,900 financial institutions. The information has also been delivered to Baihang Credit, which plans to include it in a special attention list scheduled for release in the near future. 

China Inc. $287 Billion Perpetual Bonds Flash Warning Signs - Bloomberg Some 48.9 billion yuan ($7 billion) of perpetual notes will have first call dates this quarter, which means they either have to repay the debt or be forced to increase interest rates by as much as 500 basis points. While state-owned firms, which make up a big portion of these issuers, are widely expected to redeem on call dates this quarter, all eyes are on whether the private companies that are struggling to raise funds can pay.

Seeking a bargain, and taste of the good life, Chinese buy Greek homes | Reuters The visitors are drawn to Greece by rock-bottom property prices and one of Europe’s most generous “golden visa” schemes, offering a renewable five-year resident’s permit in return for a 250,000 euro ($285,000)investment in real estate.  //  When I was in Beijing in August a couple of friends were looking at Greek visa scheme deal that had the bonus of allowing you to buy in RMB, so you did not have to figure out how to get the money offshore...

A Tug of War for Elite Skills Is Raging Across China - WSJ $$ He Chen, a 31-year-old chief executive of a robotics company, said only five of his cohort of 30 college classmates remained in Xi’an after graduation a decade ago. Most headed to wealthy Chinese megacities with dreams of a prestigious job, a soul mate and an apartment. “They left because they didn’t have any hope here,” said Mr. He. “There was no Alibaba. There was no innovation.” Now, Xi’an and its rivals are selling themselves as easy-living and low-cost alternatives to a younger generation. Last year, the average cost of a home was 40 times disposable household income in Shenzhen, 28 times in Shanghai and 26 in Beijing, according to data provider Zhongfang Institute, a housing ministry affiliate. In Xi’an, it was less than 10 times.

为经济发展和社会稳定贡献力量--中国统一战线新闻网--人民网 //  United Front head You Quan reiterates support for private enterprises helping fight the battle to alleviate poverty on a tour in Fujian

Chinese banks start scanning borrowers’ facial ticks | Financial Times $$ Chinese banks have started using micro-expression technology in an effort to spot the early signs of fraud in customers’ facial movements. The banks are worried that some potential customers may be lying about the uses of loans, so they have developed systems that use smartphone cameras to detect minute facial expressions and indicate when a user is being economical with the truth.


Politics, Law And Ideology

NPCSC Amends Criminal Procedure Law, Overhauls Judicial System Organic Laws, Loosens Stock Buyback Restrictions & Designates SPC as National IP Appeals Court – NPC Observer the amendment introduces new trials in absentia procedures [缺席审判程序] (as the new Chapter III of Part V), to be used in (1) cases of corruption and bribery as well as (1) “serious cases of crimes endangering national security or of terrorist activities” where the suspects or defendants are abroad, subject to approval of the Supreme People’s Procuratorate (SPP). The amendment has already taken effect...The Company Law [公司法] amendment rewrites article 142 of the Law, which governs stock buybacks..

China's new surveillance program aims to cut crime. Some fear it'll do much more - Los Angeles Times The surveillance video in Anxi is also broadcast to cellphones and some televisions — placing neighborhood snitches and busybodies on the front line of local security. People know they are always being watched. Fear of public shaming is the essence of Sharp Eyes — or Xue Liang — a rural security project being tested in 50 Chinese towns as part of what will be a nationwide system. The name appears to be drawn from a Mao-era slogan aimed at encouraging people to denounce those who failed to follow the Communist Party creed: “The people have sharp eyes.”

Beijing firm unveils gait recognition tech - Global Times Developed by WATRIX, the product, called "Shuidi Shenjian," can target suspects by monitoring their posture as the suspects walk from a distance of up to 50 meters away. A person's walking posture is like a fingerprint, which is unique. Gait recognition technology is more flexible than facial recognition technology. It is capable of identifying targets from any angle, regardless of if they cover their faces, wear different clothes or walk outside at night, without suspects being aware, Huang Yongzhen, CEO of WATRIX, told the Global Times on Friday.

Urumqi booming with social stability - Global Times Urumqi, capital of Northwest China's Xinjiang Uyghur Autonomous Region, has so far attracted investment from 78 Fortune Global 500 companies, following supportive government policies and improved social stability of the region.


Foreign and Military Affairs

Chinese defense minister to visit Washington next week: Mattis | Reuters “Strategic competition does not imply hostility. I have met with my counterpart in Beijing a month ago, I met with him again in Singapore a week ago, he is coming to Washington next week to continue our discussions,” Mattis said during a speech in Bahrain.

Could Japan shift away from the U.S. and toward China? No chance, government sources and experts say | The Japan Times “Strains between the United States and China may bring a lull in Japan-China ties, but Japan-China relations remain fragile,” said Kazuo Yukawa, a professor at Asia University in Tokyo who is well versed in the diplomatic environment of East Asia.

Abe voices concern over China's human rights situation - The Mainichi "Of course, with the Uighur issue in mind, (Abe told Li that) the international community including Japan has been paying close attention to the human rights situation in China," the Japanese official told reporters.

Modi and Abe agree to boost ties as Tokyo pledges huge new yen loans for India | The Japan Times Modi endorsed Japan’s “Free and Open Indo-Pacific Strategy,” which calls for rule-based order, territorial integrity and rights to free flight and sea navigation in the India-Pacific region.

The US in dire need of anti-extremism education - Global Times On Saturday morning, a gunman opened fire at a baby-naming ceremony at the Tree of Life synagogue near Pittsburgh Squirrel Hill in the US, killing at least 11 people and injuring six others. The gunman yelled "all Jews must die". Police called the incident a "hate crime"...The world is facing severe challenges from terrorism, and the birth of terrorists is related to education. Many countries are seeking education to improve people's understanding of different religions and nationalities and to understand the dangers of extremism. China has made efforts in this regard and has achieved results. Despite different conditions, China's experience in anti-extremism education in Xinjiang provides a solution to the problem for certain countries.

They Escaped China’s Crackdown, but Now Wait in Limbo - The New York Times Fleeing Uighurs have struggled to win acceptance and asylum in a world where the restrictions on them in China — including omnipresent surveillance and arbitrary detention — have won little attention until recently. They face an array of pressures from the Chinese authorities and from host countries, some of which, like Sweden, have already taken in many people fleeing conflicts in Syria, Iraq and Afghanistan.

Chinese foreign minister Wang Yi warns US against ‘interference’ in South China Sea | South China Morning Post The sharp words he reserved for Washington, which has been increasingly critical of Chinese militarisation of the contentious waters, came as Beijing pledged to expand its cooperation with Manila during a visit to the Philippines, signing deals that offered millions in humanitarian and policing aid. Wang urged the Philippines and other members of the Association of Southeast Asian Nations (Asean) to be vigilant against “interference and disruption coming from the outside” during a joint press conference with his Filipino counterpart, the newly appointed foreign minister Teodoro Locsin.

China opens consulate general in southern Philippine city of Davao to enhance relations - Xinhua Chinese State Councilor and Foreign Minister Wang Yi, who is on a two-day visit to the Philippines, said in his opening speech that setting up a consulate general in Davao reflects the deepening friendship between China and the Philippines, and serves the all-round growth of cooperation between the two countries.

Chinese State-Owned Enterprises are Eyeing U.S. Freight Rail Manufacturing: Report - The Eno Center for Transportation Chinese-backed companies are targeting U.S. freight rail car manufacturing, and their market dominance would threaten America’s economic and national security, according to a report released Monday. “National Security Vulnerabilities of the U.S. Freight Rail Infrastructure and Manufacturing Sector – Threats and Mitigation,” written by Brigadier General John Adams, US Army (Retired) and released by the Rail Security Alliance, sounds the alarm on Chinese state-owned enterprises’ (SOE) intentions to gain a foothold in U.S. freight railcar manufacturing.

China's underwater robot sets depth record - Xinhua ne of China's underwater robots, the Haixing 6000, recently set a national depth record for a Chinese remotely operated vehicle, by diving 6,001 meters below sea surface during its first research expedition, scientists told Xinhua Sunday.

China to build first Antarctic airport | Financial Times $$ “As a major Antarctic scientific research country, China must ensure the logistical support capability of its own Antarctic activities. For this reason, the construction of the new airport is of great significance…and provides support to China’s airspace management in Antarctica,” wrote the Keji Daily. “In the future, [the airport] will provide guarantees for large-scale aircraft and an air fleet.”中国首个南极永久机场即将开建 难度不亚于建设考察站 

Trump adviser says wants U.S.-Russia strategic talks on Chinese threat - Reuters U.S. National Security Advisor John Bolton said on Friday that the United States wanted to hold strategic talks with Russia about China’s belligerent activity. Bolton made the comments in an interview with Reuters in Tbilisi, the capital of ex-Soviet Georgia, where he was holding talks with senior government officials. Bolton said that Chinese missile capabilities posed a threat to Russia as the “Russian heartland” was in striking distance of such missiles.

The Sino-American Rift - Project Syndicate In this Big Picture, Brahma Chellaney argues that America’s new hard-line approach to China is long overdue, and will likely outlast the Trump administration. But Stephen S. Roach warns that a zero-sum conflict between the US and China cannot end well for either country, owing to their deep-seated economic codependency. Joseph S. Nye, meanwhile, points out that if the Trump administration wants to contain China, it will have to stop alienating America's regional allies. But Ngaire Woods sees Trump's strategy as more narrowly defined, and expects that it will lead not to a cold war, but to a more chaotic fragmentation of the international order. Minxin Pei notes that, whatever the nature of the new conflict, it does not augur well for global efforts to combat climate change or drive economic development. And Michael Spence traces the conflict's long-term implications for the structure of the global economy

Distinguished Diplomat Named Senior Fellow at Yale Law School’s Paul Tsai China Center - Yale Law School We are truly delighted to welcome the distinguished diplomat Susan Thornton to Yale Law School’s Paul Tsai China Center,” said Paul Gewirtz

Beijing Xiangshan Forum concludes with consensus - China Military "I love China. It is a country of much history and friendly people," Shaun Fogarty, director of strategic engagements with the New Zealand Defense Force, told Xinhua. "The forum has over the years become bigger and bigger, and the wide participation shows it is an important dialogue held with respect."

Video - Self-Censorship Among China Hands: Myth & Reality | Center for Strategic and International Studies Sheena Chestnut Greitens (University of Missouri) and Rory Truex (Princeton University) will present the findings from the first large-scale survey of China experts about their research experience and interactions with Chinese authorities. 

Sand mining in Mozambique by Chinese firm destroys lives — Quartz Africa The community of Nagonha in northern Mozambique sits on a tall dune with lush greenery on the one side, and a turquoise Indian ocean on the other. It should have been the kind of unspoiled landscape that Mozambique’s growing tourism industry is beginning to take advantage of. Instead, a Chinese mining company has irrevocably tarnished the scenery, and people’s lives.

China has been 'hijacking the vital internet backbone of western countries' | ZDNet Researchers point out that the Chinese government, through China Telecom, has started abusing BGP hijacks after it entered into a pact with the US in September 2015 to stop all government-back cyber operations aimed at intellectual property theft.

"This necessitated new ways to get information while still technically adhering to the agreement," said the researchers. "Since the agreement only covered military activities, Chinese corporate state champions could be tasked with taking up the slack. [...] Enter China Telecom."

The research duo says they've built "a route tracing system monitoring the BGP announcements and distinguishing patterns suggesting accidental or deliberate hijacking."

The paper - China’s Maxim – Leave No Access Point Unexploited: The Hidden Story of China Telecom’s BGP Hijacking 


Tech And Media

Google-Backed Ride-Hailing Startup Go-Jek Valued Over $9 Billion — The Information $$ Google and Chinese giants Tencent and JD.com are doubling down on Indonesia’s Go-Jek in an investment round that could nearly double the ride-hailing startup’s valuation to more than $9 billion, people familiar with the matter said.

Apple’s Iconic Stores Struggle in China — The Information $$ After finally hitting its stride with a total of 26 store openings in 2015 and 2016, Apple has slammed the brakes on its retail expansion in China, launching only four new locations in the country since then, according to an analysis by The Information. The primary reason, according to former Apple employees, is that some stores have fallen short of expectations, especially in China’s smaller cities.

Outpouring of grief after former Chinese television host Li Yong dies at 50 | South China Morning Post Li’s wife, television director Ha Wen, announced on Monday morning that Li died on Thursday in the United States from an undisclosed type of cancer, saying “I have lost my eternal love”.

Chips in focus of China's drone sector's development: expert - Global Times China, which is the world's second-largest country in the development and application of drones, must tackle the issue of domestically developed chips to meet exponential demand in the market, an industry expert said on Sunday. The comment was made amid rising trade tensions between China and the US and the latter's stated intention to maintain its technological lead.


Society, Art, Sports, Culture And History

Still taboo in mainland China: the Cultural Revolution as seen through the lens of Li Zhensheng | South China Morning Post the award-winning photographer will almost certainly never see his album Red-Colour News Soldier: Li Zhensheng on sale in his homeland. It was only in July this year that the first Chinese-language edition of the award-winning collection, which has already been printed in six languages was published in Hong Kong. The 78-year-old still hopes his work will reach more Chinese people, but for now it has to be smuggled onto the mainland.

Retired Hong Kong bishop preaches message of hate | South China Morning Post - Alex Lo Zen doesn’t want to spread religion by peaceful or legal means. He prefers persecution and suffering for mainland Catholics, while he lives safely in Hong Kong broadcasting his virulent, hateful and demented views.


Energy, Environment, Science And Health

Temperatures significantly rise on China's Qinghai-Tibetan Plateau: state media | Reuters The average temperature in the Qinghai section of the plateau has climbed 0.43 degree Celsius per decade, compared with the global average of 0.12C per decade, China’s official Xinhua news agency reported, citing monitoring data from Qinghai province.

China to switch more households in central provinces to gas heating | Reuters The 11 cities are located in the Fenwei Plain which is comprised of the provinces of Shanxi and Shaanxi, two of China’s biggest coal producing regions, as well as Henan. The area was included by Beijing as a “key battlefield” in the war against air pollution in July on top of 28 other cities in northern China.